Woolworths revaluing David Jones investment
South African retail giant Woolworths Holdings’ shares have dropped after the conglomerate signalled a revaluation of its $2 billion David Jones investment.
According to the retailer, earnings per share for the 26-week period ended 24 December 2017 are expected to be over 20 per cent lower than the prior year, “due to the inclusion in the prior period of the profit on disposal of the David Jones´ Market Street property in Sydney, as well as the impact of a potential reassessment of the carrying value of the David Jones´ assets, which is currently in process.”
In its trading update, Woolworths said David Jones´ sales performance improved in the last 6 weeks of the half, with sales increasing by 0.6 per cent in comparable stores.
However for the half year, sales were 3.3 per cent lower on a comparable basis and 3.8 per cent lower in total, which the Woolworths said was an improvement over 20 week performance.
Country Road Group (CRG) sales increased by 5.2 per cent.
Sales in comparable stores (which exclude Politix, acquired in November 2016) declined by 1.0 per cent. Net retail space reduced by 2.2 per cent and 3.8 per cent in David Jones and CRG as the retailer looks to “drive space optimisation.”
Group sales for the first 26 weeks of the 2018 financial year increased by 2.5 per cent over the prior period.
In South Africa, Woolworths Fashion, Beauty and Home (FBH) sales decreased by 0.2 per cent with comparable store sales 3.4 per cent lower.
Woolworths Food sales increased by “a market-leading 9.4 per cent”, with comparable store sales up 5.3 per cent.
Woolworths will release its interim results in February.